I will cut to the chase. FIRE Year Two was not all sugar-sprinkles and marmalade dreams. Not at all. It was completely dominated by the illness and death of Mrs Accumulator’s mum.
A sudden hospitalisation. Followed by tests, and a diagnosis that brooked no argument. There was a little time left, but not the endless supply you always assume you’ll have.
The sentence seemed suspended for a while. We had a beautiful May Day together in the garden. Mrs TA and I, her mum and step-dad. Everything was set up just as mum liked it.
Dreamy cream tea, dreamy weather, a gentle day, remembered as if in the soft focus of a film. It seemed as though nothing was wrong.
We didn’t talk about arrangements, or wishes, or any of the things we planned to, because – why spoil it?
It was the last perfect day. The last time we could pretend that everything was just as it used to be.
Time runs out.
The rest was the agony of watching a loved one slowly depart. Seeing them fight the pain and fear. You can only try to repay a little of the debt you owe for their love.
I don’t want to drag out my description of what happened or turn the experience into a trite FIRE lesson. It was just the inescapable reality for us in year two.
There is no lesson, except life cannot be avoided. You deal with it as best you can.
Perhaps Mrs TA and I were in a stronger position in that respect than we might have been a few years ago. But that’s all.
Life goes on
The most disorientating part of letting somebody go? The rest of life must still be attended to.
Initially you’re on auto-pilot, or in a zombie state. But grieving, like any other cleansing process, works to maintain your balance, patch you up, and keep you ploughing on.
So Mrs TA and I returned to building the life we want.
And one of the things I want, is to live without paying heed to the kind of grinding anxieties that sandpaper the soul.
At work, that was mainly the fear of a mid-life redundancy ending my little game of corporate snakes and ladders with a slide back down the board.
Now I’m out of that for good, I absolutely refuse to replace one insecurity with another – some new mental cheese-grater, such as fretting about my sustainable withdrawal rate (SWR), or inflation, or spending levels.
That last concern is something I want to talk more about though. Because a number of readers have mentioned that it’s troubling them.
Almost exclusively they’re FIRE-ees who find it difficult to spend.
My guess is that the FIRE population over-indexes towards natural saver types.
Whereas that was never my bag. I was a spendthrift in a former life. I had to learn how to stop chucking my money away. So perhaps undoing the purse strings isn’t so hard for me.
But I have some thoughts on how to spend, all the same. Our lean-ish FIRE still requires a good frugality game.
How to spend money in retirement
Three things help me to spend money so that it enhances our life.
Firstly, there’s mindset.
Secondly, there’s guide ropes.
Thirdly, there’s a story.
By mindset I mean our resolution on what the money is for.
We saved so hard for so long – why?
Yes, for the security of financial independence but also for the promise of a better life in the future.
Well, that future is here and it’s every bit as good as I thought it would be. So it’s time to let go a little. If we don’t spend now, then when?
We’re both past 50. How long do we have left? 20 good years? A bit more? Less?
Mrs TA’s mum was only 25 years older than us.
Am I going to spend the next decade obsessing about sequence of returns risk?
We have to live life like we mean it. I’m past spending time worrying about shadows. If something awful slithers out, we’ll deal with it then.
This free-spending talk doesn’t mean I advocate going loopy and blowing our carefully harvested FI nuts on a lambo or whatevs.
I only mean we should not feel guilt or anxiety about spending within our means.
I think it’s quite likely that the people who suffer most from spending aversion have already mapped out an extremely prudent income level. And that with back-up plans to spare.
An SWR already offers a historically safe drawdown level. If an unprecedented squadron of apocalyptic horsemen turn up like the opposition’s cavalry, then either there’s nothing you can do, or you take evasive action as the threat materialises.
On a personal level, there’s good evidence that you’ll probably spend less later in life. Forgoing spending in the go-go years at the start only means penalising yourself twice.
If you already have a good decumulation plan but your brain is badgering you for new guardrails, then create some. For example:
Live freely on a near-bombproof 2.5% SWR.
Or tot up how much you overspend every month. Put half of it into your back-up funds and spend the other half without regret.
If extreme frugality is crimping your lifestyle then try calculating that cup of fancy coffee as 0.0005% of your net worth. Expose it as a rounding error.
You’ll know best how to distract your own meddlesome mind.
This is the technique that works best for me, especially when it comes to big expenditures.
I simply create a narrative that justifies the outlay.
This might be as simple as the aphorism ‘buy cheap, buy twice’ when I’m choosing between an expensive item that will last, versus a cheapo substitute that’ll probably fall apart in a couple of years.
The line could be, “because we deserve it”, or “I’m spending this money on people I love”.
We’re renovating our home right now. In that case spending is okay because we’re going to be: “…living with it for the next 20 to 40 years”.
The extra money I pick up from hobby work is also fair game because: “it’s all a bonus, anyway”.
Perhaps inventing a story sounds like a cheap trick to your mind? But our society depends upon it. We can’t get anything done unless we collectively tell ourselves: “money is worth something”, or “we’re British, for God’s sake”, or “the time I spend on this Earth matters”.
If you’re an established yarn-spinner then please do let us know some of the ways you convince yourself to spend in the comments.
Be good to yourself
There’s one last strategy you can use to cope with financial constipation and that is to embrace it!
Money symbolises different things to each of us.
For some, its value clearly lies as much in the security that it represents as its purchasing power. And what’s wrong with that? Nothing, except that we’re constantly told that money is for spending, and that spending equals living.
Sure, most people act like that’s the case. But maybe that’s exactly what they’re doing: acting.
Or maybe you’re just not ‘most people’.
You could belong to a culturally underrepresented personality type that draws great comfort from keeping their financial powder dry – rather than flushing it down the drain.
Perhaps your happiness is to some degree dependent on underspending?
Here’s my direct equivalent. Most people apparently like parties. I don’t because I’m an introvert. Parties are an overwhelming sensory nightmare for me.
I used to think something was wrong with me until I found out that there are plenty of people like me. They just don’t get much airtime. Because nobody wants to watch a bunch of introverts having a good time. Even I don’t need to see that.
I suspect that hardcore frugality is the same.
It’s a behaviour that’s fairly obviously wired into many people from an early age.
If that’s you, maybe it’s time to stop fighting it. Not everyone lives to spend, the same as not everyone wants to be on TV.
So don’t beat yourself up.
Send yourself up by all means if your notorious tightwaddery is a matter of mirth among your nearest and dearest.
They’ll thank you for the legacy later anyway.
Sure, you can’t take it with you. But some of us self-evidently need plenty of it hanging around until the matter is beyond doubt.
Anything left over can be handed to your successors, along with your compliments for having put up with you.
Take it steady,
P.S. My FIRE budget for 2022-23 was £26,780 for two. Actual spend £25,939. I’m happy with that.
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